Mass Market, $1 trillion in Defence | Palantir Bullets #5
This week's Palantir developments and the crowned “Tweet of the Week”
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PLTR 0.00%↑ this week:
Palantir partners with Integrity, a Canadian leader in injection molding. The deal is not meaningful in size but in its signal. Integrity is a ~$170mn Revenue company, much smaller than the usual clients Palantir was dealing with and much bigger than the targets of Foundry for Builders: Palantir is going mass market. “This partnership shows how our cutting-edge technology can benefit companies of all sizes," Palantir’s Canada President.
Palantir awarded a $10mn modification to a $5mn contract with the Army for the research on AI/ML. Clearly not a big deal, but it comes for free.
Palantir expands its product offering in Automotive with QMOS. The product seeks to help OEMs to detect preventively flaws in components, therefore reducing warranty and recall campaigns. It creates valuable synergies with Palantir’s CPM product, supported by BMW, DENSO, Schaeffler, Valeo, ZF (therefore all Palantir clients), which is targeted towards collaboration between OEMs and suppliers. We can call it a “Skywise for Auto”.
Palantir’s partner Hyundai Heavy Industry is set to build an integrated platform between its subsidiaries by 2025. Starting with Doosan in 2019, Palantir is gradually penetrating into all subsidiaries of the South Korean group. As a reminder, in October, Thiel visited Hyundai’s CEO to discuss a Joint Venture to introduce and supply a tailored big data platform service to public institutions and the private sector in Korea. Hyundai, along with Sompo, is clearly a critical client in the South Asian market.
The Ambassador of France endorses Palantir’s work. To our knowledge, there is no direct impact, but it is important to underline that this level of appraisal is not common for a $15bn company. PS. Karp and Shyam should consider launching an outdoor cloth line.
Palantir puts “Crisis24 AI on steroids”, GardaWorld CEO said in an interview at Fox Business. Happy customers directly endorsing Palantir, especially if they are the CEO of a 120,000-employee group, is the most effective marketing (and it’s free).
Palantir community celebrates the anniversary of @TheKameroon’s first client dashboard; “A masterpiece.”
Avis Budget, an American car rental company with a fleet of 600,000, is using Foundry. This example is meaningful because it comes just after Hertz expanded its relationship with Palantir. Once Palantir helps a company develop solutions in a vertical, the same archetype could be used to empower similar companies in a fraction of the time. Subscribe to
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US Senate passes a record $858bn Defense Bill. The Pentagon receives ~$817 billion of that, while ~$30 billion would go toward nuclear weapons development overseen by the Energy Department. Obvious as it sounds, this expands Palantir’s TAM. Note: both are Palantir clients.
Japan unveils a $320bn military plan, becoming the third global military spender. The five-year plan will double Japan’s defence budget to 2% of GDP, which is the level that other NATO countries are targeting. This confirms what I wrote intensively about months ago in Palantir Government: It’s Now or Never; an increase in military spending is an inevitable trend which Palantir is perfectly positioned to benefit from (PLTR: Data is the New Bullet, but Nobody Cares).
Pending targets:
NHS Data Platform;
DoD Applications on JWCC;
TITAN.
Related Tech trends/Macro:
Fed raised rates by 50bps, this is the fastest hiking in modern history.
Hypergrowth software valuations eat the dust as a consequence of FED hikes. I personally see this as an opportunity to invest in those companies whose valuations are attractive, but whose businesses are not irremediably damaged by the macroeconomic stresses, but actually empowered by them.
Thomas Bravo purchases Coupa, a business spending management SaaS, for $8bn and takes it private. The transaction was closed at a valuation of 8.4x EV/Sales, a 77% premium vs. its closing price. Given Palantir’s F shares, which basically give Founders veto power, Palantir doesn’t risk being a victim of a hostile takeover. However, the hint is clear: sharks hunting in the tech waters means that current valuations are attractive.
